Grain Marketing
Commodities have seen increases across the board this week. This is due to a few factors including the escalated conflict between Russia & Ukraine, as well as a hotter/drier outlook for the second half of July. In fact, prices for wheat increased 40 cents, beans increased 14 ½ cents and corn increased 26 ¾ cents from Monday’s open to Thursday’s close.
On Monday, it was confirmed that Russia will not extend the Black Sea Trade Agreement. Since then, fighting has escalated, resulting in attacks on Ukrainian ports—causing damage to
approximately 60 000 tons of grain and grain stores. This has even further reduced exports from the region. Russia has signaled that they are willing to stop the fighting if their demands regarding the Black Sea Corridor are met. Russia is seeking reinstatement of access to the SWIFT banking system for grain export transactions of their own agricultural exports. Concerns are building that Russian ports and vessels will see the potential for retaliatory attacks by
Ukrainian forces.
Additional pressure in the region came from five EU countries; Poland, Slovakia, Hungary, and Bulgaria signed a joint declaration to ban Ukrainian grain imports for the rest of 2023 but will
allow trans-shipment thru to the rest of Europe. The reason for this is to support their domestic producers and domestic prices.
Weather has also been supportive, with forecasts anticipating hotter and drier conditions through the second half of July. Many regions of the U.S. are experiencing record-breaking temperatures
for prolonged periods of time. While many regions have experienced rain events in recent weeks (enough to improve crop conditions), it is important to note that 47% of the U.S. corn crop has reached the silking stage. At this stage, the crop is more susceptible to high heat which may impact yields.
Farmers in SW Ontario continue to try and get the wheat crop off. Essex County is nearing completion while the Northern part of our geography’s wheat crop is just getting ready to harvest.
With the rains, it has been a challenge to get the crop off. To maintain quality the market has been telling producers to get the crop off when they can. The quality is best when the wheat is taken off early and does not get too many rains after reaching maturity. With each rain event in the areas where wheat is being harvested, we’ve been seeing falling numbers dropping. Farmers
want to make every attempt possible to maintain milling quality wheat.
